Kroger Changes Strategy

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arizonaguy
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Re: Kroger Changes Strategy

Post by arizonaguy » April 11th, 2018, 5:57 pm

jamcool wrote:
April 11th, 2018, 2:47 pm
The restaraunts were long gone even before Kroger took over
Looks like they're hiring 11,000 including 2,000 managers.

https://www.cnbc.com/2018/04/10/kroger- ... agers.html

pseudo3d
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Re: Kroger Changes Strategy

Post by pseudo3d » April 12th, 2018, 6:24 am

rwsandiego wrote:
April 10th, 2018, 4:06 pm
And then we have Kroger restaurants.

http://www.cookinglight.com/syndication ... a%22%22%7d
I don't really think we'll see growth with this. Albertsons and Kroger have both been putting bars in some of its top tier stores across divisions. H-E-B has put in a few restaurants inside stores, too, mostly Central Market, but their biggest attempt with the chef-driven Table 57 closed earlier this year for (you guessed it) Curbside service. Most of their other restaurants are more or less just places with somewhat pricey hamburgers and barbecue, and nearly all of them are more located in the San Antonio/Austin region instead of Houston. To make any of these really successful, though, you need to attract people who aren't grocery shopping, and I think trying a second stand-alone restaurant at this point is jumping the gun and just a distraction.
SamSpade wrote:
April 11th, 2018, 11:49 am
Legitimately, this sounds more like a test to see if they can be more competitive with Hy-Vee with in-store restaurants.
Do Hy-Vee and Kroger compete in each other markets? I thought Hy-Vee was more Midwest (Iowa/Minnesota) while Kroger was more Rust Belt (Michigan, Illinois, Kentucky).
jamcool wrote:
April 11th, 2018, 2:47 pm
The restaraunts were long gone even before Kroger took over
Makes it all the more weirder that the Smitty's in Missouri actually KEPT their restaurants even after Albertsons took over (for a short time at least).

architect
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Re: Kroger Changes Strategy

Post by architect » May 11th, 2018, 3:59 pm

Mostly negative coverage on the Kroger front in DFW with some of the strategy changes over the past year or so:

https://www.dallasnews.com/business/ret ... ce-changes

From a shopper standpoint, their cost cutting is also becoming increasingly apparent, with understaffed checkout areas, unfresh bakery/deli/produce items, and out of stocks all becoming far too common locally. If Albertsons was competent enough to attempt a comeback, now is their chance.

arizonaguy
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Re: Kroger Changes Strategy

Post by arizonaguy » May 11th, 2018, 6:15 pm

architect wrote:
May 11th, 2018, 3:59 pm
Mostly negative coverage on the Kroger front in DFW with some of the strategy changes over the past year or so:

https://www.dallasnews.com/business/ret ... ce-changes

From a shopper standpoint, their cost cutting is also becoming increasingly apparent, with understaffed checkout areas, unfresh bakery/deli/produce items, and out of stocks all becoming far too common locally. If Albertsons was competent enough to attempt a comeback, now is their chance.
The problem here is that there is a disconnect between what Wall Street wants and what consumers want.

Wall Street is dictating all of these changes as it is fearful that without them, Kroger will not be competitive with Amazon and other online retailers. Walmart and Target are also implementing many of the same programs that Kroger is (due to pressure from Wall Street).

The problem is that many of these "technological" advances seem half baked at best and seem to distract from what customers really want which is quality service, quality products, at affordable prices. Now it's "self service, subpar products, at decent but not amazing prices." The biggest thing to drive consumers to online or non-traditional retailers is going to be these idiotic attempts to alienate them by Kroger, Walmart, Target, and other publicly traded retailers.

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Re: Kroger Changes Strategy

Post by storewanderer » May 11th, 2018, 11:46 pm

Kroger has had an incredible run as a publicly traded retailer. David Dillon used to say how they ran more like a private company than a public company. It was easier back then, I guess, to improve operations, grow sales, keep customers happy, and in turn do "good enough" for Wall Street to not give them too much trouble.

But as they say, nothing lasts forever. And Kroger has lost its way. They are still a great operator, an outstanding operator in many markets even... but the strategy is no longer clear. The stores are being pulled too many directions. There is a clear lack of focus. There seems to be a growing disconnect between Kroger doing what the customer wants, and Kroger trying to force the customer to do what Kroger wants them to do. There are initiatives being pushed down that cost significant labor/effort from the stores that few customers respond to or care about. Things like:

1. Scan bag and go: this will alienate so many middle aged/older customers. This also presents a theft risk. They are using 15 year old failed technology, difficult to deploy in markets with the bag bans, etc.
2. PR moves about gun sales and gun magazines. Again, this is something that should have been done quietly. Again, people got alienated. I had people asking me where else in Reno they could get Boar's Head because they weren't going to shop Smiths anymore after that whole fiasco. Had the company not loudly proclaimed the move, and just quietly dropped guns and gun magazines, none of those people would have noticed or cared.
3. Too many complicated promotions: app promotions, 3 day sales, 1 day sales, must log into app at this day and load the coupon to use another day... reminds me of Safeway 10 years ago. And I have had the experience now with a customer holding their phone to the cashier's side with a promotion not working as the customer expects and a 5+ minute event between the customer and cashier about it not working. Again, reminds me so much of Safeway 10 years ago...
4. "Chase Pay" program and their related refusal to accept Apple Pay (which in turn enables acceptance of Android Pay and Contactless Credit Cards). They say they will accept "Chase Pay" but where is it? I have yet to see a store accepting it. Meanwhile I can use Apple Pay at all Albertsons chains, Raleys, Trader Joes, Whole Foods, Rite Aid, Walgreens, numerous gas stations, Kohls, Macys, Starbucks, and the list goes on and on...
5. Clicklist. It may be successful in some places, but it isn't for every store and they are spending a ton of money to get this rolled out. Also the 60+ "Clicklist only offers" on the Smiths app that I have to see... confusing. Only one Smiths in my area offers this program anyway.

Despite all of that, I am still confident Kroger will find its way. I think they have too strong of a foundation between a strong pricing program, strong private labels, generally strong store volumes, and good people in the divisions and at the store level, that once the upper management gets out of the Wall Street/money pit focus, that they will get back to basics and do very well again.

Trying to cater to Wall Street is what doomed the old publicly traded Albertsons and Safeway operations. The merged present-day Albertsons company continues to flounder along; they have squandered away their time being private and failed to seriously cut prices. Now that they are going public again, we will see what happens next... maybe their very heavily grocery-experienced management is smart enough to not get caught throwing money into the money pit initiatives Kroger has been participating in the past couple years... frankly, with all that debt, they can't afford to get caught up in all this. And maybe that limitation will serve them well.

arizonaguy
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Re: Kroger Changes Strategy

Post by arizonaguy » May 14th, 2018, 4:49 am

Fry's is selling a property it has owned since 2006 in an area where new home construction is starting to pick up.

http://tucson.com/business/fry-s-scraps ... e-trending

This seems like the type of location that Kroger should be building new stores in. I thought I'd never say this, but with Safeway opening up a new store in the Phoenix area and this location being similar to a lot of the more recently built Safeway stores, I could see Safeway moving in (and an opportunity potentially squandered by Kroger/Fry's).

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Re: Kroger Changes Strategy

Post by Super S » May 14th, 2018, 4:07 pm

I have noticed a few oddities popping up with Fred Meyer lately. Among them, things such as when pop is advertised as 4 12 packs for $10, you have to actually buy 4 12 packs instead of being able to buy one or two for $2.50 each as in the past. I have also noticed at least four different types of shopping carts in use in one store, in addition to the smaller "half size" carts they have. The multiple carts, some which still bear older Fred Meyer logos, looks a little junky. And in produce, two types of plastic bags, one (which they have used for years) which is strong with handles that bears the Fred Meyer logo, and one which is thin, hard to open, and has a tendency to tear easily. I have also noticed at times that Fred Meyer is being very aggressive on center grocery pricing, at times even lower than WinCo on some items, so it's not as if they are totally out of touch, but oddities such as the pop make me wonder.

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Re: Kroger Changes Strategy

Post by storewanderer » May 14th, 2018, 8:54 pm

arizonaguy wrote:
May 14th, 2018, 4:49 am
Fry's is selling a property it has owned since 2006 in an area where new home construction is starting to pick up.

http://tucson.com/business/fry-s-scraps ... e-trending

This seems like the type of location that Kroger should be building new stores in. I thought I'd never say this, but with Safeway opening up a new store in the Phoenix area and this location being similar to a lot of the more recently built Safeway stores, I could see Safeway moving in (and an opportunity potentially squandered by Kroger/Fry's).
Either Kroger is really hard up to cut development, or the site simply won't work for them. I am guessing they want to see a solid $750,000+ per week in sales volume for a Fry's Marketplace. Safeway is probably happy at $400,000 per week in sales volume. This however begs the question, why didn't Kroger re-tool this and just build a regular Fry's on the site (which they probably would want to see at least $500,000 per week in sales volume from)...

Also I wonder if Kroger has not identified a different/better site nearby... maybe the development patterns have changed since 2007 when they picked this site?

After what I saw of Albertsons and Safeway in Phoenix area last month, I don't think Kroger has much to worry about. They are very seriously underperforming. What I am expecting them to do is close more stores. Their lousy pricing, few open checkouts and no self checkout, and amazingly high priced and tired looking produce are not the formula for success. I can't figure out why they can't get their everyday pricing more competitive. Lots of great specials, yet still doing the inflated "buy 1 get 2 free" meat down in Arizona with things like 7.99/lb "thin" or "seasoned" chicken breast, that they stopped in other places... their main hope is in places where Kroger isn't (like El Paso).

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Re: Kroger Changes Strategy

Post by storewanderer » May 17th, 2018, 11:19 pm

I see they are rolling out Scan Bag and Go in my area as well. The Sparks Smiths now has 12 self checkouts (up from I think 8 previously). They appear to have just been installed as they don't even have Catalina Checkout Coupon printers at some of the new self checkouts yet.

The Scan Bag and Go is a large kiosk like thing by the front entrance with scanners, bags, and a scrolling video showing how easy it is to use.

The Sparks Smiths opened in 1987 and has been through a couple light remodels (wall repaints mainly) still has all of its original 30 year old tan shelves and about 2/3 of its original 30 year old tan floor tiles. The store is a very very busy and well run store, but physically is in lousy condition and remodels have been canceled/delayed at least 3 times now in the past couple years. In one regard, I am happy to see them spending money in this market. However, they are doing so questionably and priorities do not seem to be quite straight. I find it ironic that Kroger can so freely throw money at initiatives like this Scan Bag and Go, yet continues to put off a remodel that is VERY needed.

Meanwhile Raleys is about to add six stores in the market and has a couple new builds in the works as well... huge missed opportunity for Kroger in this market (and many others where they aren't building stores particularly on the west coast).

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Re: Kroger Changes Strategy

Post by Super S » May 22nd, 2018, 9:23 pm

I was in the Longview Fred Meyer today and noticed a lot of closeouts occurring in the home area. Most of the paint is marked down 50% including all Miller and Dutch Boy custom mixing, as well as many items in the tool area, and some automotive. I also noticed that they stopped carrying Interstate batteries (They kept them locked up here and all cases were empty, as if they are doing away with batteries altogether). There were similar closeout signs in other areas as well. It looks like some scaling back of general merchandise is going to take place soon, possibly for a rumored remodel. I really hope they aren't going to water hardlines down like Target has though. At the very least this is indeed a new strategy for Fred Meyer....

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